March 15, 2019 / 1:01 PM / 7 months ago

Breakingviews - Volkswagen CEO’s Nazi pun constitutes peak gaffe

Herbert Diess, Volkswagen's new CEO, poses during the Volkswagen Group's annual general meeting in Berlin, Germany, May 3, 2018.

LONDON (Reuters Breakingviews) - Volkswagen’s Herbert Diess has effortlessly claimed pole position on the grid of foot-in-mouth chief executives. The boss of the 74 billion euro carmaker on Thursday apologised for evoking a Nazi slogan by saying “EBIT macht frei”, and was forced to acknowledge that his company’s dark history gave it a “special responsibility in connection with the Third Reich”. Call it peak gaffe.

Diess’s words echoed “arbeit macht frei” or “work sets you free”, which appeared on the gates of Auschwitz under the Nazi regime during the Holocaust. He was presumably talking about the financial buffer afforded to companies with healthy operating margins - salient for VW given its rising investments for electric cars.

Okay, but Diess gets paid 8 million euros annually to exercise judgement. Other CEOs have ill-advisedly referenced fascism – as Facebook’s Mark Zuckerberg did last year when he implied Holocaust deniers might have made an honest mistake. Still more have taken a self-defeatingly flippant approach to their brand. UK jewellery boss Gerald Ratner famously described one of his products as “total crap”. Former German TV executive Thomas Ebeling told analysts he wasn’t too worried about Netflix stealing his viewers because ProSieben’s clientele were “obese” and “slightly poor”. Ex-Goldman Sachs CEO Lloyd Blankfein said his firm was doing “God’s work” shortly after the financial crisis.

In combining the two, Diess easily takes the poor-judgment trophy, however. VW in its early years actually relied on slave labour from Nazi concentration camps. It’s ill-advised to make any type of joke about the Holocaust, but especially when your company is in some way associated with it.

When Sainsbury’s CEO Mike Coupe sang “we’re in the money” after striking a deal that would probably lead to job cuts, he at least said sorry swiftly. Diess’s exculpatory statement – that his gag had been placed in a “false context” – hardly hits the mark, especially given that his pun implied he had put some thought into how best to make a serious point about his company. VW’s recent brand history is all about noxious emissions; it’s quite extraordinary its CEO thought it was smart to add some of his own.


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